Onward and upward: Q4'24 M&A trends in Financial Services

Along with the broader financial services sector, regional banks with assets ranging from $15 billion to $100 billion are expected to actively engage in M&A in 2025, either as acquirers or targets. Although the Federal Reserve has begun cutting rates, inflation remains a concern, and interest rates have increased due to several factors. The Trump administration is anticipated to ease the regulatory scrutiny of deals, while competition from both traditional banks and non-bank entities continues to intensify. This year could be pivotal for many regional banks in determining whether they can remain independent. To maximize deal value, regional banks need to enhance their M&A preparedness by considering new factors such as data, third-party relationships, IT infrastructure, artificial intelligence, and customer experience.

2024 was a strong year for financial services M&A despite a challenging economic landscape. As we move into 2025, we expect this upward trajectory to continue, driven by improving market sentiment and long-term fundamental trends. Here are some key insights from last year:

• Total financial services deal volume rose over 9 percent to 5,329, and value jumped more than 39 percent to $371.0 billion.
• The banking, capital markets, and insurance subsectors all experienced higher deal volume and value.
• Five of the year's eight largest transactions were in capital markets, two were in insurance, and one was in banking.
• Strategic acquisitions accounted for most of the deal value and deal volume.

Find out more about the trends shaping financial services deals this year in our latest report, "Onward and Upward”.